Imperial Irrigation District (IID)
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Imperial Irrigation District (IID) appreciates the opportunity to comment on the California Independent System Operator (CAISO) presentation during its 11/16/15 Stakeholder meeting discussing the 2015-2016 Transmission Plan. IID’s comments are focused on the presentation entitled “Policy Driven Planning Deliverability Assessment Assumptions” and also on generation data shown under the 2015-2016 RPS Portfolio. 1. In the Policy Driven Planning presentation, third bullet, slide 4 “Import Assumptions” it states that IID imports through IID-SCE and IID-SDGE branch groups is increased from 2016 MIC. What is this new value of MIC for IID moving forward from 2016? 2. Further in this presentation it was mentioned that Imperial CREZ can accommodate up to 1750 MW of new generation. How is this 1750 MW determined? Can you provide a breakdown of where this generation is (or will be) located and how many MWs at each location? 3. IID’s internal studies have indicated that Imperial CREZ can actually accommodate up to about 2800 MW depending upon where generation is located while respecting the ECO- Miguel constrained path. Did CAISO consider the Locational Effectiveness Factor (LEF) while determining the 1750 MW? 4. A formal presentation was made to CAISO senior management in March 2015 to share the above IID findings through ZGlobal. CAISO subsequently, performed an internal study to verify ZGlobal’s findings and came up with a draft discussion paper recommending further analysis. 5. To follow up on IID internal study and ISO’s own study, IID is recommending that IID and ISO staff work together to identify the most promising locations for new renewables in the Imperial Competitive Renewable Energy Zone (CREZ) to maximize the use of available transmission capacity in IID and CAISO systems to provide an overall benefit to California ratepayers. IID and CAISO studies are attached for reference. 6. A discussion paper focusing on the efficient use of existing transmission system to optimize renewable resources from the Imperial CREZ follows: 4823-5547-1403.1 Page | 1 MAXIMIZING THE EFFICIENT USE OF EXISTING TRANSMISSION IN THE VALUATION OF IID EXPORT CAPABILITIES IID submits these comments through the CAISO 2015-2016 Transmission planning process. As stated before, IID believes that the current ISO Maximum Import Capability (“MIC”)is inconsistent with the physics of the grid, underutilizes existing transmission capacity, provides incentive to locate projects that have the highest adverse impact on the grid, and increases costs to both IID and CAISO/IOU’s ratepayers. These comments are focused on providing real examples to directly point out these inefficiencies. The objective is to work with the CAISO and the stakeholders to correct these inefficiencies and ensure fair and efficient use of the transmission system in both BAAs for the benefits of all California. As California’s power system evolves in response to 33% -- now 50% -- renewable energy goals and beyond, it is important to incent new generation projects to make the best possible use of existing transmission facilities. The vehicle by which to satisfy this objective is to incorporate an explicit consideration of how to utilize existing transmission capacity in a flexible and efficient manner into renewable project valuation. This can be accomplished by taking into account: (1) the optimal utilization of existing transmission infrastructure; (2) an assignment of a proportional share of transmission costs to projects utilizing new transmission infrastructure regardless of the rationale for the new build; and (3) the allocation of project deliverability in a manner that incents proposed new generation projects to interconnect to facilities that will minimize their overall contribution to existing transmission constraints. Background and Facts 1. The IID's BAA accounts for 98 percent of the entire area in the Imperial CREZ. 2. Only 2 percent of the Imperial CREZ lies within the CAISO BAA. 3. Over 1,200 MW of wind and solar are under PPA with the IOUs that directly connect to the CAISO facilities in the Imperial CREZ. 4. However, only one solar project of 150 MW (one PPA) with SDGE has been constructed in the IID BAA and is currently delivering solar energy to SDGE customers. 5. IID has ample available transmission capacity to allow significant additional amounts of renewable generation to reach the CAISO BAA. The cost of this available capacity is the lowest in California at $3/MWh. 6. As a result of the MIC currently assigned to IID, renewable energy projects in the Imperial CREZ are incentived to obtain transmission service from CAISO, bypassing the IID system, despite the inefficiency of doing so. 7. There are two existing interties between CAISO’s system and IID’s system that provide the needed bridges between these two energy producing and energy consuming areas. These bridges also provide an efficient and effective pathway that can enable California to achieve a significant percentage of its renewable energy goals at a cost that is significantly lower than the cost associated with projects that would interconnect 4823-5547-1403.1 Page | 2 directly into the CAISO. 8. IID submitted to CAISO in March 2015 an analysis demonstrating the generation locational impact in the three CEC designated Imperial CREZ regions (North, south and East). In addition, CAISO has acknowledged these locational impacts (both papers are attached for reference). Inadequate Deliverability from IID into the CAISO In 2011, several stakeholders, including IID, CAISO and California Public Utilities Commission (CPUC) identified potential issues with the way in which the Maximum Import Capability (MIC) between the IID Balancing Authority Area (BAA) and the CAISO BAA was calculated. Recognizing the disadvantage that renewable energy projects interconnecting to IID’s BAA faced, on July 7, 2011, the CPUC issued an Assigned Commissioner Ruling (ACR) by Commissioner Ferron that proposed to modify the CAISO’s MIC process by developing a forward looking MIC calculation methodology, as opposed to relying solely on historical scheduled imports into the CAISO from IID. In that ACR, the MIC from the IID BAA to the CAISO was determined to be 1,400 MW, which is consistent with resource development projections in IID. The ACR specifically stated that it would be unreasonable for CPUC-jurisdictional load serving entities (“LSEs”) to assume less than the 1,400 MW of MIC for procurement calculation purposes. Since the issuance of its 2012 Transmission Planning Report (2011-2012 TPP), the CAISO has included a MIC value table showing the MIC from IID to CAISO for a ten-year planning horizon. Since then, this MIC value table has been used by LSE procurement staff in RFO bid evaluations for projects situated in the IID BAA, and in order to assign resource adequacy values to IID projects. Project lenders also use the MIC value table in their project evaluations. As such, the contents of this MIC value table are of paramount importance to projects situated in the IID, to LSE procurement staff, and to project lenders for successful completion of renewable projects in IID service territory. In its 2013-2014 transmission plan, however, the CAISO indicated zero incremental deliverability for generators or projects connecting to the IID BAA, while projects that are within the Imperial CREZ or a few yards away, which can interconnect directly to the CAISO system, were deemed deliverable, and some of these were awarded PPAs1. Other renewable energy projects that otherwise would have been located in and interconnected to the IID BAA were forced to construct gen-ties and connect to the CAISO BAA in order to obtain deliverability and be considered in the Indpepently Own Utilities (IOUs’) 1 http://www.8minutenergy.com/news/press/srpcorp 4823-5547-1403.1 Page | 3 solicitations. The renewable energy projects built gen-ties in order to connect directly to the CAISO BAA, in some instances only a few hundred yards away from comparable project sites in the IID BAA, were awarded with Power Purchase Agreements (PPAs) totaling 1200 MW, whereas otherwise competitive projects that would interconnect to the IID BAA were awarded no PPAs at all. To demonstrate the seriousness of this problem, consider two projects X and Y, both 100 MW and both projects bidding $60/MWh and $50/MWh respectively for renewable energy as a fully deliverable product. Both projects are located in the Imperial CREZ. Project X plans to connect to CAISO Imperial Valley substation as shown in Graphic 1: Project X. Project Y plans to connect to IID’s Coachella Valley Substation as shown in Graphic 2: Project Y. Because of where the projects interconnect and the resultant energy flows toward the load center in San Diego, the congestion on the transmission corridor downstream leading to San Diego where the energy is consumed is worsened considerably by Project X (CAISO BAA interconnection), but only minimally by Project Y (IID BAA interconnection). By interconnecting to the CAISO’s Imperial Valley Substation, Project X contributes 35% of its energy output toward worsening congestion on the transmission corridor to San Diego. However, because Project Y is interconnected further north to IID’s Coachella Valley Substation, it contributes only 2% of its energy output to worsening congestion on the transmission corridor to San Diego. Graphic 1: Project X Graphic 2: Project Y Everything else being equal, and assuming the IOU intends to purchase 100 MW, the current CAISO MIC “kills” project Y from even competing with project X based on the wrong 4823-5547-1403.1 Page | 4 assumptions of no available MIC from IID. Even if Project Y is cheaper than Project X, the IOU’s procurement will dis-qualify Project Y based on no MIC availability. In this instance, rojects connecting to IID BAA always lose to projects a few miles away but connected to CAISO BAA.